PLANSPONSOR - September - October 2023 - 40

PLAN PROFILE | A 2018 PLAN SPONSOR OF THE YEAR
Continuous Improvement
I
Kimley-Horn and Associates, Inc., winner Corporate 401(k) >$800mm
n 2018, Tammy Flanagan, chief
financial officer at this planning
and design engineering
consulting firm, headquartered
in Raleigh, North Carolina,
told
PLANSPONSOR, " At Kimley-Horn
and Associates, Inc., we hire great
employees, we serve great clients,
and we work hard and run a successful
business. These strengths put us
in a position to reward our employees
with what we believe are the best
benefits in our industry. "
Steve
Lefton,
president
and
CEO of the company today, says
this still holds true five years later.
" Remaining on the 'Fortune 100
Best Companies to Work For' list for
16 years is a great source of pride for
us. We receive aggregated data back
from Fortune that helps us understand
where our benefits might need
to be, since 75% of the recognition is
based on anonymous feedback from
our employees. "
Kimley-Horn is a privately held C corporation. " There's a
is independent of our 401(k) and has
outperformed the Standard & Poor's
indexes over the past 20 years. We
have
approximately
800 owners
today and continually promote
employees to shareholders, on an
annual basis. "
Roughly 50% of active participants
are under age 30, and in 2018
the company contemplated automatically
enrolling new hires into a
Roth 401(k). Lefton notes the benefits
Kimley-Horn considered: participants
paying taxes upfront and withdrawing
contributions and earnings
tax-free in retirement, plus the fact
that younger workers are typically
earning less and in a lower tax bracket
than they would be when retired, etc.
In the end, Lefton says, " after
Steve Lefton, president and CEO, Kimley-Horn and
Associates, Inc.
clear path to ownership that is earned based on performance
whether an employee is practicing in the field of engineering,
accounting or whatever their vocation is, " Lefton says. " The stock
PLAN SNAPSHOT
PLAN SPONSOR: Kimley-Horn and Associates, Inc., Raleigh, North Carolina
PLAN ASSETS: $1.56 billion
PARTICIPANTS: 8,000
PARTICIPATION RATE: 97.9%
AVERAGE DEFERRAL RATE: 7.7%
DEFAULT DEFERRAL RATE: 4%
DEFAULT INVESTMENT: T. Rowe Price Hybrid Trust
EMPLOYER CONTRIBUTION: 200% of 4%, plus profit sharing-normally 10%
studying and studying, we concluded
that auto-enrolling folks into a Roth
account felt too close to giving financial
advice. Instead, what we've done
is work with recordkeeper T. Rowe Price to create a Roth microsite
that we're using to educate and inform our employees, particularly
the newer, younger ones. "
In 2021, the company expanded its relationship with its advisory
firm, CAPTRUST, from a 3(21) to a 3(38) relationship. " We
had used CAPTRUST as advisers beforehand, but, as fiduciaries,
we needed to go out to market, so we held an open request for
proposals. We ultimately selected CAPTRUST, " he says. " The
process allowed us to pool our assets with assets of other companies
that utilize CAPTRUST as a 3(38) adviser, to reduce fees.
This brought our [advisory] fees from .36, pre-3(38) to .27. "
Administration fees-which Kimley-Horn pays for participants
with under two years of service-have also decreased.
" We've been working hard with T. Rowe Price on that, " Lefton
says. The recordkeeping administration fees are $60 annually or
$15 per quarter, down from $88 annually in 2018.
Lefton likens the company's retirement plan to a good race
car. " It's running-it's been running-fast, and we look to how
we can make fine adjustments to further improve the plan. We
know already what's running well, and [those are the places]
where we had focused. " -Judy Faust Hartnett
40 PLANSPONSOR.COM September - October 2023
Art by Chris Buzelli
http://www.PLANSPONSOR.COM
PLANSPONSOR - September - October 2023

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